Paul Romer is an economist who is at the vanguard of the most exciting school in the science today: New Growth Theory. Some history: until the 1960s, economists believed that economic growth resulted from two things:

1. investing today's surplus (mostly profits) in more equipment, like factories and/or more civil infrastructure, like highways and canals
2. adding more workers through social policy -- immigration, the baby bonus, etc. -- to accomplish more economic activity at lower cost

In the 1950s, Robert Solow amended that formula by adding technology to the mix. In Solow's view, most economic growth results from technological change -- discovery -- while some still results from the things mentioned above. As an economist, Solow didn't seek to understand why technological change occurred, but he could measure it and this came to be called the Solow Residual. The Solow Residual measures the pace of discovery: things like more viscous motor oils, more durable highway pavement, more efficient light bulbs. Imagine for a moment that in World War II you were asked by your government to build a computer with eight billion vacuum tubes; in fact, winning the war would be easier than building such a device, though today you can buy 8.56 billion transistors at Wal Mart for $10 in a 2 gig flash key.

In Solow's view, this technological change occurs exogenously -- outside of the economic system. Perhaps discoveries happen in universities, or in government labs.

Romer's contribution in the 1980s, as a young economist moving between Chicago, MIT and, for a year, Queen's University in Kingston, was to place technological change within the economy. For Romer, transistors don't become smaller because the government makes this a priority, but because every man woman and child in North America may have bought 1000 transistors in 1985 annually, via their TV remote controls, Walkmans and home computers. Today, we perhaps buy 25 billion transistors annually -- all the while directing investment to transistor development and research, while innocently playing X-box or using a remote control or answering a cell phone.

In fact, the Soviets developed the system of centralized discovery; that regime was an impressive force in science and technology, but this was never linked to the market system and so advances never went beyond the moon -- which in fact is not a good thing. The Soviet model could not benefit from compounding returns from discovery, from the X-box market funding the development of faster computers that design better transistors to make faster computers. Romer boldly projects increasing returns for humanity in perpetuity.

Richard Florida and Jane Jacobs comprise the Yin and Yang of urban theory. Jacobs prized diversity and density as necessities for a thriving city; Florida looks for thriving cities to find pools spawning the ideas that are changing the world. Famously, Florida uses a "gay index" to rate cities; though predominance of overt homosexuality in a city is unlikely to cause genius, it tends to be correlated with tolerance and openness to new ideas; while Pride Week doesn't spawn transistor development in any direct way, Florida believes that a city that can handle Pride Week is more likely to discover new things. To Florida, this diversity is exogenous; Jacobs situates it in an urban planning policy that, thankfully, Toronto has to a large degree adopted. So has New York and many other leading cities.

So, to this point in my post you have Jane Jacobs telling us how to arrange cities, Richard Florida telling us how good cities produce discovery, and Paul Romer telling us that discovery matters more than anything else when describing economic growth.

But take this interesting article by a U.S. academic, Vivek Wadhwa. Titled, America's Perilous Anti-Immigrant Protectionism, Wadhwa delves into recession-fueled Xenophobia in America -- blaming foreigners for taking "American jobs"; Wadhwa claims he himself is not excepted, receiving hate mail and threats for pointing out roughly what I have just written -- that America's immigrants are not taking "commodity jobs"; rather, they are growing the U.S. economy through discovery linked with the uniquely pervasive American market system. In simple terms, non-white people are inventing things and then employing lots of white people, all the while keeping America at the leading edge of economic growth and technology.

Wadhwa astutely notes that these immigrants, facing hate and anti-immigrant policies, may be taking their ideas elsewhere; just as many smart Jewish Germans did in the mid to late 1930s, in large part enabling the U.S. and not German to invent the atom bomb.

Much has been written about global neoliberalism and the "race to the bottom" of corporate tax rates -- certainly, states like Ireland have benefited by agreeing to charge multinationals much less tax. Horrible poverty has been wiped out in a generation by this.

But what about the race to attract the next Sergey Brin, the next Vivek Wadhwa, the next Albert Einstein? A cleavage is occurring in employment between the highly skilled and those who can only sell their labour as a commodity; the market is global for both, creating horrible pain for the unskilled and incredible opportunity for the skilled.

Growth in the global economy is from knowledge. People who are smart enough to contribute to that are smart enough, open enough to migrate globally. India and China must produce smart kids at the same rate as the U.S., or Britain -- just look at the competition in our universities at a point when the majority of people in these countries do not have access to proper education or opportunities to showcase their inheritance. In time, the cities with the right planning -- structural change -- and the states with the right policies to attract these people will quickly become better than the other ones.

[Note: this post was called Xenophobia, discovery, and economic growth; Richard Florida linked to it under the current title, which I thought was a good one, so I changed it.]

Until last week, I was taking a night course in political science -- pre-graduate type of thing. I handed in my final essay at the last class last Thursday. It was a cool essay, looking into issues of law and democracy; whether it is democratic for the judiciary to overrule the majority (parliament) in Canada.

Metaphorically for me, the content was pretty interesting but the process sucked -- I crammed it out in little more than a week of late nights, staying up till 4:00 am the night before I submitted it. But after I handed it in, I didn't actually feel exhausted. I felt refreshed; in the wake of a week of little sleep and long hours reading dense legal theory, (on top of a day job and parenthood), I felt as relaxed as I might after a week of vacation. Creative new ideas are popping into my head that have nothing to do with legal theory. I slept 6 hours last night so I could watch a move and don't feel the least tired.

This got me thinking. I saw Reservation Road last night -- ho hum. But a plot premise is that a bored, under-employed suburban father about my age believes to some degree that he could find his true calling in life by spending six months or more unemployed and promenading or journaling in Paris (family in tow). I used to do this very thing (sans famille) for this very reason.

So which is it? If you really wanted a sense of "otherness" -- a separation from monotony -- a new, vital clarity, creativity and sureness about yourself, should you do a lot of nothing or a lot of something? Should you bake, or break, your brain?

Let me be clear, forgetting my exhaustion Thursday night (and subsequent debilitating neck spasm ;-), I felt about as good from Friday till now as I would after resting totally on a dock by a lake for five days. Normal life feels easy after hard thinking.

Of course, I worked really hard on this essay, and learned a lot of new things; I was passionate about the subject and about getting the argument right. Work is rarely like that. So then the issue becomes: is it more "living" to -- take an easy job that permits you to travel or write or play sports or do whatever feels like real life to you; or, to find a passionate vocation and work exceptionally hard with brief breaks.

I remember the economic theory I read years ago describing the trade-off between work and leisure; economics made a moral assumption that all people prefer unpaid leisure to paid work, and that they trade some leisure for some income; economics assumes "work to live." Common Sense today talks about not working too hard and smelling the roses. But maybe it's more tangled than that.

I called this post The Snowball because I think that's a nice label for the effect of working hard; you don't get tired, you get bigger. You know a little more, have a little more experience, and have a little less to do -- everything else should be a bit easier, and so on. A snowball rolling along gets bigger.

What motivates a personal trainer? Some people love the culture of gyms. But I think personal trainers are often motivated by helping people. For 30 or 60 minutes at a time, they're physically close to a person who, in many cases, wants to feel better about themselves; trainers have the ability to help them get there. You could say that there's no irony between them -- the trainer isn't using a bait-and-switch technique, or attending sessions on how to "sucker in" more clients.

Usually, they're not just acting like, but are being a real person. Pretty simple, really.

Notwithstanding all that, training is normally capitalistic. My friend trains in her clients' homes and drums up work herself. She's an independent business person -- she uses her own capital to buy equipment and promote her company.

The free market is competitive. Though Adam Smith anticipates many features of capitalism -- the minute division of labour chief among them -- the pitting of opponents against one another to produce the best offer (product, price or marketing/placement) for consumers is central to how we view the positive side of the system today.

But within this system is a central irony -- that companies want to profit from their relationship with customers -- certainly from the consumer relationship (the B2B relationship is a bit harder to fudge). Most of the ads I take in make me feel like I'm being lied to; in fact, I think most people of my generation automatically handicap anything they receive via mass distribution, or that doesn't carry a label of authenticity with it.

What is the larger effect of this? I try not to consume media much anymore; just radio and Internet mainly, but few movies or magazines and no TV. But if I, like many people, took in hours of media daily, and if it was all funded by explicit and implicit (embedded) advertising messages, would that not affect how I see the world? The level of trust I generally have.

And would that carry over to my trust of political leaders, or in fact of policies that were genuinely developed in an objective and fair way -- the governance of our nation. Or of personal relationships, or of how I might relate socially in public places, like malls or sidewalks, or while driving in traffic.

I think there's something big about closeness -- I think physical trainers are more likely to develop friendships with clients than to lie to them and use them. What about mid-sized private companies? Are they more authentic than multinationals? And, if so, what is it about multi-nationals that makes then inauthentic? Can a multinational consumer chain be built that cultivates genuine and honest relationships in all points of business (relationships with suppliers and other vendors, creditors, employees/owners, and customers)? What if a group of local, authentic businesses formed a federation -- would it change things? What if that federation adopted a form of central authority -- what then?

I've written before that authenticity is big -- in PR and in business as well as of course in life. But for people who don't perform personal training or public school teaching etc. as a career, it can be difficult to not creep over that line. But that line really, in the long run, is vital personally and in society.