Eclectic Curiosity

Posted on September 25th, 2002, by Steve Hardy in Archives, Uncategorized. No Comments

Here’s a classic Wired article – The Economics of Ideas – about Stanford economist Paul Romer, best known for his papers on New Growth Theory – a theory that suggests non-rival goods like ideas drive economic growth instead of rival goods such as scarce resources because ideas can be leveraged infinitely. Romer was named one of America’s 25 most influential people by Time magazine in 1997 and has ignited a lively discussion that is still highly relevant to the new economy.

Call Romer an economist for the technological age. The world, in Romer’s view, isn’t defined by scarcity and limits on growth. Instead, it’s a playground of nearly unbounded opportunity, where new ideas beget new products, new markets, and new possibilities to create wealth. “Old growth theory says we have to decide how to allocate scarce resources among alternative uses,” says Romer. “New growth theory says, ‘Bullshit!’ We’re in this world, it’s got some objects, sure, but it’s got these ideas, too, and all that stuff about scarcity and price systems is just wrong.'”

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