I am presently watching Niall Ferguson speak on entrepreneurial freedom in the global financial system, a presentation given at the St. Gallen Symposium 2010.
According to Professor Ferguson, the innovations brought about during the industrial revolution not only increased the efficiencies of goods manufacturing, it also made it easier for the very people who made those goods to buy more.
Relentless innovation and competition from entrepreneurs has driven down the costs of manufactured goods ever since. Schumpeter's description of the process of "creative destruction" speaks to the realities of economic survival; according to the evolutionary mode of thought, there are businesses and business models that, not unlike a doomed species, are not supposed to survive.
Ferguson begins this lecture with some frank talk about Americans' delusions about their rapidly rising wealth twice over a ten year period (first in the dot com bubble, followed by the real estate boom) and moves on to address the realities of economic decoupling, as seen in the recession in the developed world vs. slowing growth in developing economies.
He then offers a quick rundown of the factors which brought on the recent financial crisis, leading up to a historical overview of the industrial revolution and the efficiencies created by the "entrepreneur-driven process". Where industrial technologies and industrial processes were successfully spread, they came about mainly as a result of risk taking by entrepreneurs.
What comes next after that? Let's tune in and find out.
