I just got back from the Virginia Department of Motor Vehicles (DMV). As mentioned earlier, I had to retake knowledge exams and a roadtest. Today I had to take the roadtest, where an instructor joins you in your car to see whether you are fit to drive.
Firstly, a brief note on my absence, since tomorrow it would have been 7 months since my last blog post. In April this year I started working as a strategy consultant at Deloitte. Life’s been slightly different than it was a student, sadly leaving practically no time for writing here.
A while ago Sarah and I were on a trip to the U.S. Somewhere along the trip we watched the soccer game of the U.S. versus Mexico. After the game goalkeeper Tim Howard and offensive midfielder Clint Dempsey were interviewed. Something caught my attention, but at first I didn’t really know what it was. Then it hit me: these guys actually know what they are talking about.
Innovation is deemed crucial to sustained economic growth and welfare improvement. One may subsequently pose, as I do, that innovations require some sort of inequality before they can blossom. This does not mean that some people need to be kept poor so that others can innovate; it means that those individuals who have the potential to significantly improve things for society should be enabled (or left free) to act on that potential.
One of my favourite writers (and speakers), Milton Friedman, explains that experimentation, which is closely related to innovation, can bring tomorrow’s laggards above today’s mean. I’ve drawn the picture below to illustrate what he means (or at least how I understood he meant it):
Thus, if we accept that today some inequities exist, which means that some are poorer than others, tomorrow the poorest (the “laggards”, on the left end of the graph) may be better off than the average today. The crucial insight is that inequalities are relative. Even though some may be better off relatively, everyone is better off absolutely.
Last summer in London I experienced the 2012 Summer Olympics. Many were preoccupied with the ‘total medal count’, which counts the number of golden, silver, bronze, and total medals per country (pick that category in which your country is performing best). Of course, the total medal count is not a ‘fair competition’. Some countries have a larger population, which gives them a bigger pool of athletes to fish from. Other countries are richer, which gives them more resources to facilitate the searching and training of potential medal-winners. I wanted to put the achievements of countries into perspective, and more specifically, to be able to say things like “given its population size and wealth, [insert country of interest] performed well during London 2012” with a bit more confidence. As for my motivation: indeed, I come from a small country, whereas my girlfriend comes from the U.S. – last summer I heard “The Star-Spangled Banner” way more often than “Het Wilhelmus“. Continue reading