Glenn Hubbard: Why Innovation is So Uniquely American
The US economy, more than any other in the world, is an engine of growth thanks to capitalism. The power of capitalism lies in its ability to enable innovation and its potential to create opportunity for everyone.
If you were to ask the question, “Why isn’t the whole world rich?” It’s surely that some economies are market economies and oriented towards capitalist success and others are not. So, I think of the system, the basic capitalist system, as being a very powerful engine of growth.
What policy can do is either generate opportunity, which is great, or limit opportunity, which is bad. And that’s why I say there is a real policy need to focus on work, the support for work, and the support for inclusion in the workplace.
Here, the goal is for capitalism to have equal opportunity for everyone. The system itself really provides that. I still think of that innovative growth potential in the world that is having an American face, and I don’t think its because people in the United States are smarter or more clever than people in other countries.
We have the institutional framework and the market system that supports that kind of innovation. If I were to think of the goods and services available to Americans today, a huge fraction of them were not available at all 100 years ago. At all. That’s because we have a market economy where people are able to divert talent, capital, into what’s new and important. We win when that happens.
This is Capitalism.