Back to Basics Series: Where does economic growth really come from? (with W. Brian Arthur and Cesar Hidalgo)

Pitchfork Economics with Nick Hanauer

Civic Ventures

Business, Government, News, Politics

4.8 • 1.5K Ratings

🗓️ 22 July 2025

⏱️ 47 minutes

🔗️ Recording | iTunes | RSS

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Summary

Is economic growth just about money, trade, and GDP? Or is something deeper at play? In this episode, economist W. Brian Arthur and physicist Cesar Hidalgo join Nick and Goldy to reveal the real drivers of rising prosperity: human knowledge, know‑how, and innovation. They challenge the old assumptions of growth and argue that innovation isn't a byproduct of a strong economy—it's a cause of economic growth. Once we understand that, it changes how we think about investing in people and shaping the economy. Part of our Back‑to‑Basics summer series. Essential listening for anyone who believes that growth should empower people, not enrich the status quo. This episode originally aired January 15, 2019. W. Brian Arthur is an economist and complexity theorist, renowned for his work on technology and innovation. A longtime researcher at the Santa Fe Institute and former Stanford professor, he’s the author of The Nature of Technology, in which he argues that economic growth stems from evolving combinations of existing technologies. Cesar Hidalgo is a physicist, professor at the Toulouse School of Economics, and Director at the Center for Collective Learning at Corvinus University of Budapest. He’s also the author of Why Information Grows, where he explores how knowledge and know-how shape economies, arguing that real prosperity comes from embedding insights in people and collaborative networks. Social Media: ‪@cesifoti.bsky.social‬ Further reading: The Nature of Technology Why Information Grows Complexity Economics: A Different Framework for Economic Thought Economic Complexity: From useless to keystone Complexity Economics Shows Us Why Laissez-Faire Economics Always Fails Website: http://pitchforkeconomics.com Instagram: @pitchforkeconomics Threads: pitchforkeconomics Bluesky: @pitchforkeconomics.bsky.social Twitter: @PitchforkEcon, @NickHanauer, @civicaction YouTube: @pitchforkeconomics LinkedIn: Pitchfork Economics Substack: The Pitch

Transcript

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0:00.0	Hey, pitchfork listeners, Goldie here. We've been doing this podcast for a long time now,
0:05.8	so we thought we'd take a little break this summer. But we don't want you to miss us too much,
0:10.7	so we thought we'd revisit some of the most essential episodes from early in our history
0:15.7	with a back-to-basic summer series. And what could be more basic than our conversation with W. Brian Arthur about where does
0:25.5	economic growth really come from?
0:30.6	I think we've made this mistake of politically or culturally idealizing a system that was never meant to become a cultural ideal.
0:43.3	Complexity is really where our wealth, our standard of living, comes from in a modern society.
0:51.3	It's rather like saying we want to look at how butterflies fly, and to do that, we'll
0:57.0	chloroform them and nail them to a board and then figure out.
1:06.0	From the offices of civic ventures in downtown Seattle, this is Pitchfork Economics with Nick Hanauer, where we explore everything you wished you'd learn in Econ 101.
1:32.3	I'm David Goldstein, Senior Fellow at Civic Ventures. So Nick, in episode five, we ended by talking about what a sucky measure of growth GDP.
1:41.3	Yes.
1:42.3	Yeah.
1:43.3	And we promised in this episode we'd come up with something a little better.
1:47.8	Yeah. So what do we have? Well, I think that if you're going to talk about growth in any sort of
1:54.0	meaningful way, you have to examine the question, growth of what? Like, what do we want more of?
2:01.6	Money?
2:02.6	Well, you know, that indeed, thinking about money, is the conventional way to think about prosperity
2:08.6	and growth and market economies, as in the more money you have, the more growth you have,
2:13.6	and the more prosperous you are. But there's a really easy way to see why money is actually not a very good way to conceptualize
2:24.5	prosperity.
2:26.5	And it is to imagine yourself as king or queen of the jungle and having a ton of money, all the money in your society, I don't know what it would be
	...

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