George A. Akerlof and Robert J. Shiller’s book ‘Animal Spirits’ is an examination of the workings of the economy from a neo-Keynesian perspective, or more precisely from a post-Milton Friedman perspective. Revisiting Keynes notion that economies are not governed by the rational economic calculator known as the ‘invisible hand of the market’, Akerlof and Shiller detail how speculative bubbles become normalised within our culture based on a herd instinct where prices are inflated on the basis of speculation rather than any sense of their relative value. One passage stands out:
“A nation’s investment – in new machinery and equipment, new factory buildings, new bridges and highways, new software, new communications infrastructure – ought to matter enormously for its economic prosperity. These tools convert our simple labour into modern and sophisticated output. The better our tools, the better our standards of living will be. If a country imports the most up-to-date machinery and software, or better yet builds it itself, its workers are forced into a learning experience that keeps them abreast of the latest thinking in technology. The investment produces hands-on-experience with new technology” (Akerlof and Shiller p.142).
This seems to me like a good reason to continue to support the investment in universities capabilities in handling and managing technology, and the development of stronger links with businesses and industry in order to ensure that these advances are propagated into our economy. I, and my colleagues in the Department of Media Technology, have had more than ten years experience widening the range of students who are open to this learning experience. Taking students with no technical capability or experience, and helping them to develop the confidence that allows them to graduate as competent and capable media technologists. This is a story that is worth telling, sharing and debating.
The most vital question we have to answer in our present circumstances then is ‘where is the innovation and entrepreneurship going to come from that will revitalise our economy?’ And, ‘are universities going to have the confidence to challenge old elites and certainties, and instead promote innovation and new ways of doing things?’
Leave a Reply