Up & Coming Weekly

November 15, 2022

Up and Coming Weekly is a weekly publication in Fayetteville, NC and Fort Bragg, NC area offering local news, views, arts, entertainment and community event and business information.

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WWW.UPANDCOMINGWEEKLY.COM NOVEMBER 16 - 22, 2022 UCW 5 OPINION Powerful ideas drive growth debate by JOHN HOOD e science fiction pioneer H.G. Wells once observed that "human his- tory is, in essence, a history of ideas." is is a wise observation — and it speaks to the political debates we've been having here in North Carolina. Wells himself was an influential purveyor of ideas. Some were praise- worthy, such as his exploration of the effects of technological change. Other ideas Wells embraced, such as social- ism and eugenics, were abhorrent. Still, by engaging in a serious discus- sion of important ideas, Wells contrib- uted not only to the development of science fiction as a literary genre but also to the realization that human af- fairs cannot be reduced to a mechanis- tic clash of impulses and interests. Lots of "experts" disagree. ey think that when politicians or intellectuals argue for or against a particular policy, they're just putting up a rhetorical smokescreen to disguise what are re- ally self-serving actions. Impulses and interests matter, of course, but so do ideas. Consider our ongoing debates about how best to accelerate and broaden economic growth in North Carolina. Progres- sives and Democrats tend to argue that the state will prosper to the extent it spends more money on public services intended to increase the productive capacity of the economy. Conserva- tives and Republicans tend to argue that North Carolina will prosper to the extent it reduces the tax and regulatory barriers that keep entrepreneurs, in- vestors, and highly productive profes- sionals from creating and expanding businesses. is is not simply a clash of personal or institutional agendas. It reflects a longstanding debate about the eco- nomics of growth. Generally speaking, you can group the various theories into three categories, each bearing the name of an influential thinker: • Smithian growth from scale. In 1776, Adam Smith argued that eco- nomic progress comes from broaden- ing the scope of production and trade. at allows people to specialize in the tasks they do best, trade what they make with others (either within a com- pany or around the world), and make each other better off as a result. • Solovian growth from investment. Beginning in the 1950s, Robert Solow, an economist at the Massachusetts Institute of Technology, co-created an influential model for explaining long- term growth that included changes in population, capital formation and technology. In public policy circles, this model has often been used to argue for more government spending on infrastructure (physical capital), research and development (intellec- tual capital), and education (human capital). • Schumpeterian growth from entrepreneurship. Joseph Schum- peter, an Austrian-born economist at Harvard University during the first half of the 20th century, argued that economic trends were impossible to explain without recognizing the "cre- ative destruction" led by individuals who respond to previously unforeseen opportunities in the marketplace by creating, financing, or managing new enterprises. ese ideas aren't incompatible. Indeed, it would be truly odd for anyone to dismiss the economic benefits of trade, capital formation, or entrepreneurship. e debate is about emphasis and priorities. Trade, for ex- ample, is a net positive but the effects typically aren't gigantic. On capital, economies with significant investment clearly grow more rapidly over time than do economies with little to no investment. But after a certain point, spending more money — particularly in the public sector — doesn't produce enough gain in productivity to offset the cost of the expenditure. ese are ideas well worth more study and discussion. You can expect North Carolina policymakers, scholars and journalists to do just that for years to come. You can also expect the cyn- ics to continue to deny that there is any important debate to be had — that ab- stract ideas and intellectual arguments are irrelevant to the real business of policymaking, which is driven purely by power and interest. For people who disdain the value of persuasion, they appear to spend an extraordinary amount of time and effort trying to persuade the rest of us that they're right. JOHN HOOD, Board Member, John Locke Foundation. COMMENTS? Editor@upandcomingweekly.com. 910-484-6200 At this season of Thanksgiving, we are grateful for the opportunity to serve you with a high-quality education at an affordable cost! Spring classes begin January 9– now is the time to apply and commit to pursuing your dream career! Thankful for hope through education! Over 280 programs leading to the award of associate degree, certificate, or diploma in these areas: • Business • Computer Information Technology • Engineering • Healthcare • Human Service Technology • Media & Fine Arts • Public Safety • Skilled Trades • University Transfer Let FTCC help you find your way forward as a new year arrives! www.faytechcc.edu – (910) 678-8400 – admissionscounselors@faytechcc.edu

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