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Kenneth J. Arrow Lecture Series
Creating a Learning Society: A New Approach to Growth, Development, and Social Progress
It has long been recognized that most standard of living increases are associated with advances in technology, not the accumulation of capital. Yet it has also become clear that what truly separates developed from less developed countries is not just a gap in resources or output but a gap in knowledge. In fact, the pace at which developing countries grow is largely determined by the pace at which they close that gap.
Therefore, how countries learn and become more productive is key to understanding how they grow and develop, especially over the long term. In Creating a Learning Society, Joseph E. Stiglitz and Bruce C. Greenwald spell out the implications of this insight for both economic theory and policy. Taking as a starting point Kenneth J. Arrow's 1962 paper "Learning by Doing," they explain why the production of knowledge differs from that of other goods and why market economies alone are typically not efficient in the production and transmission of knowledge. Closing knowledge gaps, or helping laggards learn, is central to growth and development.
Combining technical economic analysis with accessible prose, Stiglitz and Greenwald provide new models of "endogenous growth," upending the received thinking about global policy and trade regimes. They show how well-designed government trade and industrial policies can help create a learning society; explain how poorly designed intellectual property regimes can retard learning; demonstrate how virtually every government policy has effects, both positive and negative, on learning; and they argue that policymakers need to be cognizant of these effects. They provocatively show why many standard policy prescriptions, especially associated with "neoliberal" doctrines focusing on static resource allocations, impede learning and explain why free trade may lead to stagnation, while broad based industrial protection and exchange rate interventions may bring benefits, not just to the industrial sector, but to the entire economy.
The volume concludes with brief commentaries from Philippe Aghion and Michael Woodford, as well as from Nobel Laureates Kenneth Arrow and Robert Solow.
678 pages, Kindle Edition
First published January 1, 2014
About the author
Joseph E. Stiglitz
220 books1,670 followersJoseph Eugene Stiglitz, ForMemRS, FBA, is an American economist and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the John Bates Clark Medal (1979). He is also the former Senior Vice President and Chief Economist of the World Bank. He is known for his critical view of the management of globalization, free-market economists (whom he calls "free market fundamentalists") and some international institutions like the International Monetary Fund and the World Bank.
In 2000, Stiglitz founded the Initiative for Policy Dialogue (IPD), a think tank on international development based at Columbia University. Since 2001, he has been a member of the Columbia faculty, and has held the rank of University Professor since 2003. He also chairs the University of Manchester's Brooks World Poverty Institute and is a member of the Pontifical Academy of Social Sciences. Professor Stiglitz is also an honorary professor at Tsinghua University School of Public Policy and Management. Stiglitz is one of the most frequently cited economists in the world.
In 2000, Stiglitz founded the Initiative for Policy Dialogue (IPD), a think tank on international development based at Columbia University. Since 2001, he has been a member of the Columbia faculty, and has held the rank of University Professor since 2003. He also chairs the University of Manchester's Brooks World Poverty Institute and is a member of the Pontifical Academy of Social Sciences. Professor Stiglitz is also an honorary professor at Tsinghua University School of Public Policy and Management. Stiglitz is one of the most frequently cited economists in the world.
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Displaying 1 - 16 of 16 reviews
May 22, 2017
Uma ótima discussão sobre o papel que o ensino pode ter na sociedade. O ponto mais importante é como crescimento e progresso depende do conhecimento acumulado na sociedade, tanto pelo ensino formal quanto pela cultura de trabalho.
Olhando por este lado, nem sempre crescimento econômico implica em avanço social. Mudar a indústria do seu país para fora pode tornar produtos mais baratos e até aumentar as vendas, mas ao mesmo tempo priva sua indústria do conhecimento gerado. Ao mesmo tempo que uma indústria que nem é tão saudável ainda pode valer ser mantida se o conhecimento que gera beneficia outras.
O livro ainda discute depois quando conhecimento é gerado ou não de acordo com políticas de proteção (como patentes) e quando há competição. Um livro denso de economia, mas bem acessível e com boas ideias.
Olhando por este lado, nem sempre crescimento econômico implica em avanço social. Mudar a indústria do seu país para fora pode tornar produtos mais baratos e até aumentar as vendas, mas ao mesmo tempo priva sua indústria do conhecimento gerado. Ao mesmo tempo que uma indústria que nem é tão saudável ainda pode valer ser mantida se o conhecimento que gera beneficia outras.
O livro ainda discute depois quando conhecimento é gerado ou não de acordo com políticas de proteção (como patentes) e quando há competição. Um livro denso de economia, mas bem acessível e com boas ideias.
December 8, 2019
I'm rating this book 4 stars because I'm not confident enough in my understanding of the content to rate it 5 stars. My background in economics is quite weak. I view ratings as recommendation, thus I don't feel comfortable justifying a full score given that I don't have a good grasp on the content.
Now for my opinion: this is the best book on economics I have read. It's answered many concerns/questions I had. It's becoming more and more obvious that knowledge, and its acquisition, are necessary to performs well in today's world. Growth almost solely depends on innovation and its spread. The book opens showing the neoclassical model (basically, the model enacted in US and EU laws and trade agreements), performs quite bad with respect to learning.
I really liked the structure of the book: first analyze the knowledge dynamics, then criticize current policies because they don't favor (and often, go against) learning. Finally, suggest alternatives. The main suggestion I got back from this book: A) "Infant" economies (basically meaning, not the North countries) should isolate themselves (partially!) from trade to favor inner production and thus *learn by doing*. (The author doesn't say what can small countries who cannot hope to be present on all markets can do). B) Intellectual Property is necessary, but scaling it down would be desirable. Prizes are better (also suggested in the second machine age) because the result are made public. C) (Kinda quick on this:) Diversity improves learning, so it's better not to have inequalities (and thus focus on welfare).
The problem I have with Stiglitz though, is that he is quick to spot problems with the current market organization, not the agency problem for monopolies (no competition so no reason for employee to look for improvements), but never even note the agency problem with respect to government. This is the major critic against heavy-handed government interventions. The East Asian countries the author mentions so often (Japan, South Korea and China) have had a very long tradition of having a reliable and efficient bureaucracy. That maybe why they were able to implement the policies he advocates for. How can others do?
Now for my opinion: this is the best book on economics I have read. It's answered many concerns/questions I had. It's becoming more and more obvious that knowledge, and its acquisition, are necessary to performs well in today's world. Growth almost solely depends on innovation and its spread. The book opens showing the neoclassical model (basically, the model enacted in US and EU laws and trade agreements), performs quite bad with respect to learning.
I really liked the structure of the book: first analyze the knowledge dynamics, then criticize current policies because they don't favor (and often, go against) learning. Finally, suggest alternatives. The main suggestion I got back from this book: A) "Infant" economies (basically meaning, not the North countries) should isolate themselves (partially!) from trade to favor inner production and thus *learn by doing*. (The author doesn't say what can small countries who cannot hope to be present on all markets can do). B) Intellectual Property is necessary, but scaling it down would be desirable. Prizes are better (also suggested in the second machine age) because the result are made public. C) (Kinda quick on this:) Diversity improves learning, so it's better not to have inequalities (and thus focus on welfare).
The problem I have with Stiglitz though, is that he is quick to spot problems with the current market organization, not the agency problem for monopolies (no competition so no reason for employee to look for improvements), but never even note the agency problem with respect to government. This is the major critic against heavy-handed government interventions. The East Asian countries the author mentions so often (Japan, South Korea and China) have had a very long tradition of having a reliable and efficient bureaucracy. That maybe why they were able to implement the policies he advocates for. How can others do?
February 25, 2020
This book isn't quite what I was expecting. It's very industry-focused, and argues for state intervention (anti-laissez-faire) in sectors and the economy as a whole, in order to foster and encourage learning and therefore drive productivity and growth. There's some interesting and probably valuable analysis of policies that currently don't help this situation, such as intellectual property rights regimes.
I'm slightly skeptical of everything here however, for two reasons. Firstly, there's a lot of technical economics modelling and formulae that I skipped over (because I'm not interested). There's a real danger these fail to capture the near-infinite number of parameters actually involved, and give a false sense of security/rigour/truth about the results. Stiglitz and Greenwald mention in the book that a major correlation of company success during the financial crisis was essentially the personality of the CFO; how much debt they were willing to get into influenced how well the company could deal with problems. Economic models are never going to capture things like this.
The other reason is that I don't think this analysis is looking "low" enough. At best it needs to be augmented by sociological research into how to promote a learning culture within a population. I believe that most people lack the knowledge to understand how the very basics of the economy work in today's complex and complicated world. Creating better policies and ideas at the population level, rather than industry-sector level, are essential to ensure that people can make informed decisions and develop realistic ideas for change.
I'm slightly skeptical of everything here however, for two reasons. Firstly, there's a lot of technical economics modelling and formulae that I skipped over (because I'm not interested). There's a real danger these fail to capture the near-infinite number of parameters actually involved, and give a false sense of security/rigour/truth about the results. Stiglitz and Greenwald mention in the book that a major correlation of company success during the financial crisis was essentially the personality of the CFO; how much debt they were willing to get into influenced how well the company could deal with problems. Economic models are never going to capture things like this.
The other reason is that I don't think this analysis is looking "low" enough. At best it needs to be augmented by sociological research into how to promote a learning culture within a population. I believe that most people lack the knowledge to understand how the very basics of the economy work in today's complex and complicated world. Creating better policies and ideas at the population level, rather than industry-sector level, are essential to ensure that people can make informed decisions and develop realistic ideas for change.
December 28, 2019
A mind-opening book.
There are few books that provide me a new look at basic things and this book is one of them. It is amazing to realize that I've never read, listen or think about economic policy in this very (maybe most) important aspect: learning.
Prof Stiglitz explains a very good framework to think about decisions in creating policies to promote growth and prosperity. So many puzzling economic decisions are much clearer in the light of this framework.
There are few books that provide me a new look at basic things and this book is one of them. It is amazing to realize that I've never read, listen or think about economic policy in this very (maybe most) important aspect: learning.
Prof Stiglitz explains a very good framework to think about decisions in creating policies to promote growth and prosperity. So many puzzling economic decisions are much clearer in the light of this framework.
May 5, 2019
Dense, thoughtful, entertaining, and insightful. A strong argument towards the creation of new policies to promote innovation and learning in society.
This book is a mix of economic theory, political sciences, and education.
This book is a mix of economic theory, political sciences, and education.
December 30, 2021
The book is details, intuitive and in the end disappointing.
While it pulls interesting observations from current world economy, it has chosen to ignore the economy behind it. Why is DPRK or Cuba poorer than their neighbors? Oh that's because they didn't promote the learning economy, not because it has been under this brutal embargo for the past half a century!
This book is what happens when you want to make an analysis of global economy from the realistic standpoint, but is afraid to talk about Class.
The redeeming factor in the book is that it goes against the Washington hegemonic ideas of economic development with actual data. But unfortunately fails to realize that ideas didn't shape the reality, rather reality shapes ideas. That is to say, a better economic model presented to Washington wouldn't change the nature of Washington, but the military might of Washington dictates the fate of the rest of the world regardless.
While it pulls interesting observations from current world economy, it has chosen to ignore the economy behind it. Why is DPRK or Cuba poorer than their neighbors? Oh that's because they didn't promote the learning economy, not because it has been under this brutal embargo for the past half a century!
This book is what happens when you want to make an analysis of global economy from the realistic standpoint, but is afraid to talk about Class.
The redeeming factor in the book is that it goes against the Washington hegemonic ideas of economic development with actual data. But unfortunately fails to realize that ideas didn't shape the reality, rather reality shapes ideas. That is to say, a better economic model presented to Washington wouldn't change the nature of Washington, but the military might of Washington dictates the fate of the rest of the world regardless.
February 13, 2021
A book that challenges traditional assumptions that economists took for granted: most firms operate under their production possibilities curve and are forever catching up to “best practices”, migration is not enough to change the endowments of a host country significantly, FDI can reduce GNP per capita while increasing GDP, IP rights can lead to reduced innovation and monopolies can lead to increased innovation. A book that left me pondering over lots of questions and reflections over economic theory.
June 16, 2022
Un libro real, bien escrito, claro y preciso que relata la importancia de crear un mundo donde le aprendizaje y la educación sean condiciones obligatorias para países y sociedades que creen en el futuro y en la construcción de un mejor mañana. Sector publico y privado son responsables en igual de medida de crear una sociedad del aprendizaje !!! EXCELENTE LIBRO
March 4, 2021
Not what I was hoping for.
The book is mostly about how industry innovations and patent regulations can promote learning if managed well. Felt like the target reader of this book is policymakers of either government or business sectors.
The book is mostly about how industry innovations and patent regulations can promote learning if managed well. Felt like the target reader of this book is policymakers of either government or business sectors.
February 17, 2023
El libro es una recopilación de estudios sobre lo que debe ser una sociedad de aprendizaje, una sociedad que quiere tener futuro, una sociedad que debe ser alentada y construida con cimientos fuertes.
This entire review has been hidden because of spoilers.
July 20, 2018
Divulgación de los principales desarrollos teóricos y prescripciones de políticas que surgieron a partir de las conferencias de K. J. Arrow.
August 24, 2018
Excelente
Da un panorama completo sobre la innovación que es de provecho tanto individual como colectivamente. Es anacrónico y vale la pena releerlo cuanto sea necesario.
Da un panorama completo sobre la innovación que es de provecho tanto individual como colectivamente. Es anacrónico y vale la pena releerlo cuanto sea necesario.
July 21, 2019
Review
Useful book with good structure.
Most of chapters was well built and easy enough to understand
I wish a lot of people read this book
Useful book with good structure.
Most of chapters was well built and easy enough to understand
I wish a lot of people read this book
November 9, 2015
This book took me nearly a year to read but I did actually find it very interesting. While I use economics every day in my job my academic economics study was only every at first year undergraduate level which teaches you just enough to feel like everything you are being taught is wrong. I found I glazed over at the formulas in this but I was actually able to follow the arguments and they confirmed for me and showed why they were correct many of the things I instinctively felt already as well as teaching me several new things. Would recommend.
October 22, 2016
One of those books that rewires your plan of the world. A very simple idea that explains why so much of what seem like "obvious" consequences of conventional economics -- in particular, the free-trade market-liberalisation consensus -- are simply wrong.
November 17, 2015
Didn't analyze carefully the models presented, but still an interesting read. As Arrow points out in the epilogue, I'm not sure how protectionist measures would work if everyone implemented them.
Displaying 1 - 16 of 16 reviews