Project for Philosophical Evaluations of the Economy |
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Academic institutions unduly monopolize the notion of intellectual credibility
Statement on the need for self-made thinkers, published on May 23, 2012
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The following is the copy of an email which we have sent on May 17 to University of Chicago Professor Raghuram
Rajan. Professor Rajan is one of the leading supply side economists of our times. He is a former chief economist
of the IMF. He gave the keynote speech at Alan Greenspan’s farewell reception. And he correctly questions the
lasting impact of anti-cyclical government intervention which other economists such as Professor Krugman tend to
continuously proffer these days. Our email to Professor Rajan reads as follows:
answer to this email? - Of course not! And, yet it is this absence of a response which is at the heart of the
distortion that the supply side of Western economies is suffering from. Because, by now, it has become way too
difficult for self-made entrepreneurs and pioneers to get any meaningful attention in the marketplace since the
monopoly of credit worthiness which highly recognized academic institutions exercise therein make it next to
impossible for those home-made innovators to get the strategic collaboration which they need.
Or to put it even differently: How should a no-name innovator ever be able to do his share to decrease the supply
side distortions which exist in our mature economies if even the leading supply side theorists aren’t willing to grant
him a helping hand?
Statement on the need for self-made thinkers, published on May 23, 2012
--------------------------------------------------------------------------------------------------------------------------------
The following is the copy of an email which we have sent on May 17 to University of Chicago Professor Raghuram
Rajan. Professor Rajan is one of the leading supply side economists of our times. He is a former chief economist
of the IMF. He gave the keynote speech at Alan Greenspan’s farewell reception. And he correctly questions the
lasting impact of anti-cyclical government intervention which other economists such as Professor Krugman tend to
continuously proffer these days. Our email to Professor Rajan reads as follows:
- “Dear Prof. Rajan,
As an embattled Euro-zone European, I believe the time has come to explicitly thank you for providing a much needed
counter-argument to the sea of Keynesian populism that is engulfing us now more than ever. In particular, I would like to
congratulate you for the observation that the structural problem in today’s debt ridden economies is not so much the lack of
adequate demand but rather the lingering inability of these countries to produce enough useful and commercially viable
things. (see your article: The True Lessons of the Recession, in Foreign Affairs )
It is, in deed, correct that Western economies, perhaps with the notable exception of Germany and California, have
generally failed to generate a steady flow of relevant, perhaps even ground breaking, product and service innovations which
would allow them to maintain a competitive edge in today´s super-competitive world market. And it is equally true that
mature economies have by and large failed to educate their citizens in such a way that they could constructively adapt to and
add sufficient value in a fast changing market-place.
Now, obviously, the real question that poses itself here is this: What do governments and societies really have to do culturally
and politically to encourage a better performance both on the educational and on the innovative front. And the general
answer so far has been:
- to grant tax credits to start-up companies
- to foster a venture capital industries (complete with Angel investors, incubators etc.)
- to encourage further cooperation between industry and universities
- to provide government sponsored retraining schemes to unemployed workers
- to promote the set-up of “elite”academic programs and universities
- to integrate more practical (case study etc.) aspects into otherwise rather theoretical academic study programs
- to accept immigration of highly skilled engineers and workers from abroad
- to increase flexibility in the labor law
- to reduce welfare entitlements (rise of pension entry age, co financing of health care services etc...)
- to employ a constant political rhetoric that advocates a “need for change” and a need to adapt to a “fast moving
marketplace”
- But if we are honest here, we have to admit that none of these measures has been sufficient to turn the tide in the structural
loss of competitiveness which Western economies have been witnessing for a quite a while now. So, something else needs
to happen to achieve that supply side breakthrough which some of us are working towards. And in my humble opinion, this
supply side turnaround can only come by way of changing the criteria according to which the perception of credibility is
being granted in the marketplace.
Because at this time, the intellectual and entrepreneurial credibility and credit worthiness of prospective innovators and
applicants is more based on first appearance and circumstantial evidence rather than on the quality of content and the merit
of argument. In this, standard wisdom in our mass society has it, that
- previous success, no matter where, raises the possibility of future commercial success
- academic degrees, by definition, enhance the capability to add value
- degrees from prestigious universities naturally deserve more attention than those from not so prestigious
organisations - employment experience with well known companies is better than career experience with less well known companies
- and better looks are generally better than not so good looks etc...
In fact, it is this standard operational procedure which banks, politicians, editors, strategic partners and human resource
personnel apply when taking their decisions that leads our societies to heavily favor the established over the innovative, the
incumbent over the new and the well groomed over the self made. It, hence, comes as no surprise that, when in doubt, even
the most free market-oriented governments tend to rescue banks and defend their national industry champions once the
latter come under any kind of existential threat.
In other words, it seems crucial to me to understand that no mature economy will be able to maintain its competitive supply
side edge if it continues to harbor an institutional skepticism towards self made leadership. And yet this skepticism towards
self styled innovators has never been as huge as it is now. ( ... perhaps with the exception of technological pioneers who
have an easier time to explain what it is that they defend since their application tends to do most of the explanation for itself).
I know what I am talking about here, since I have repeatedly experienced the habitual distrust which a no name tends to
receive just for being what he is.
Perhaps, it would help if you could include that kind of reasoning into your own future work.
Best regards,
WL
www.noahdenkt.com”
answer to this email? - Of course not! And, yet it is this absence of a response which is at the heart of the
distortion that the supply side of Western economies is suffering from. Because, by now, it has become way too
difficult for self-made entrepreneurs and pioneers to get any meaningful attention in the marketplace since the
monopoly of credit worthiness which highly recognized academic institutions exercise therein make it next to
impossible for those home-made innovators to get the strategic collaboration which they need.
Or to put it even differently: How should a no-name innovator ever be able to do his share to decrease the supply
side distortions which exist in our mature economies if even the leading supply side theorists aren’t willing to grant
him a helping hand?
| © Landei Selbstverlag, owned by Wilhelm ("Wil") Leonards, Gerolstein, Germany. All rights reserved. Reminder: Noah denkt™ is a project of Wilhelm ("Wil") Leonards and his Landei Selbstverlag (WL & his LSV). Consequently, all rights to the texts that have been published under the Noah denkt™brand name are reserved by WL & his LSV. The commentary and the reasoning that was provided on this page is for informational and/or educational purposes only and it is not intended to provide tax, legal or investment advice. It should therefore not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or any issuer by WL & his LSV or its Noah denkt™ Project. In fact, WL & his LSV encourage the user to understand that he alone is responsible for determining whether any investment, security or strategy is appropriate or suitable for him. And to leave no doubt as to what this means we urge our user to also note our extended Legal Notice. |
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| Keywords: Raghuram Rajan, The True Lessons of the Recession, distorted supply side, supply side distortions, perception of intellectual credibility, monopoly of intellectual credibility, monopoly of intellectual credit worthiness,need for self-made leadership, breakthrough of self-made thinkers, credibility of self-made innovators |