Economic Growth is Ultimately Not Explained by Physics

(Don Boudreaux)

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The physicist Michio Kaku was the keynote speaker at my son Thomas’s college graduation ceremony this past Saturday. Kaku’s talk inspired my most-recent column for AIER. A slice:

I suspect that Kaku would reject my argument. Being a physicist, he sees a direct connection between the work of physicists and our ready access to televisions, cell phones, and MRI machines. But I suspect that Kaku misses the less scientifically breathtaking, but much more economically important, activities that ensure our access not only to obviously marvelous products such as TVs, smartphones, and advanced medical care, but also to the no less marvelous likes of indoor plumbing, hard floors and roofs, and ample supplies of food, potable water, and clean clothing.

The executive who introduces a new inventory-management system – the financier who finds a way to direct more capital to start-up firms; the vice-president of operations who creatively figures out how to shave a few cents off of the cost of manufacturing ball-bearings or quarter-inch screws; the entrepreneur who riskily arranges for the production and offering for sale of an entirely new product -– market participants such as these ensure that technological discoveries aren’t confined to university laboratories but are transformed into readily available consumer goods and services.

None of these – and countless similar – commercial activities is the work of physicists. But without such efforts, each one typically (if wrongly) regarded as mundane, the genius ideas of physicists would never find their way into the everyday goods and services that make modernity the marvel that it is.