Welcome to Econ Talk, part of the Library of Economics and Liberty. I'm your host Russ Roberts

of Stanford University's Hoover Institution. Our website is econtalk.org or you can subscribe,

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Today is October 22nd, 2013, and my guest is Nobel Laureate Edmund Phelps of Columbia

University. His latest book and the subject of today's episode of Econ Talk is Mass Flourishing,

how grassroots innovation created jobs, challenge, and change.

Ned, welcome back to Econ Talk. Thanks a lot Russ. Let's start with what you mean by flourishing.

Good question. To be roughly speaking, I mean prosperity, but of course prosperity is a word that

we throw around without any very precise definition. I do mean prosperity, but in particular,

there's a part of it that I think is a key concept. You might call it prospering. We wouldn't

say that somebody is prospering just because he has a high wage. Now, we might say that somebody

with a rising wage is prospering, but I'm particularly interested in the case where the rising

wage is a result of the individual's efforts. His investment in himself, the experience he's

gained, the insights he's gained, that kind of thing. I'm not interested in the wage gains that

come from what's going on in the global economy, which is causing the guys wage to rise through no

effort or through no effort on his own. You follow me? Yes, but you also mean something much richer

in the book than just material well-being. Absolutely. That's the material side. Now,

on the non-material side, I mean the having fun, not every day, but lots of times. In the process

of doing the work, in the process of exploring and experimenting and discovering and

all that. There's the material prospering that is all about the money that comes from

...