How to become rich without even knowing how

I wrote this in 2009 as a reflection on a special guest lecture that I had attended. The title of the lecture was “How to get rich without knowing how: The Paradox of Development Economics.” The professor was William Easterly, who is also a pretty controversial guy. I like some of the stuff that he had to say but I don’t agree with it all. Let me know your take on it.

I walked into this lecture a couple minutes late, and was greeted by the extremely audible Professor Easterly screaming, “You can’t predict innovations or they wouldn’t be innovations!” I knew I would enjoy this lecture from the start. I’m not a big economics buff, but I know that economics is extremely important for both our nation and the world in order to rectify many of the problems which we are faced with today such as poverty and oppression. In the same way that we can’t predict innovations, Professor Easterly also pressed us all to understand that we really can’t predict anything, and that set the premise of an amazing lecture.

A lot of what Professor Easterly said appealed to me because I’m a Politics major, who is really into social justice, and I never really saw the relationship between a good leader and growth in the way that he depicted it. There is something that he dubbed, “The leadership bias,” which basically states that whenever random good growth occurs, the leader in charge is viewed as a great one, and whenever random bad growth occurs the leader is viewed as a bad one. With an emphasis on randomization, Professor Easterly essentially stated that good growth and bad growth can’t be attributed to a leader because they can’t be predicted, therefore any policies that a leader could pass in order to create change are useless. We looked at the “Democratic Republic of World Bankistan,” a made up country that Professor Easterly used in order to get his point of randomization across. He showed us periods of good growth and periods on bad growth on the projector. Everyone blue box was good growth, and every yellow box was bad growth. He gave reasons for prolonged periods of good growth such as harmony within the government or an overall national consensus on foreign policy, and he also gave us reasons for the hiccups of periods of bad growth. His reasons were all plausible, and then he flipped it on us, and told us that the yellow and blue boxes were just the flips of a coin! That sort of blew my mind and made his whole spiel on randomization that more valid.

Professor Easterly then went on to discuss something dear to my heart, which is change. He spoke about how change within the world has to come from the bottom up, opposed from the top down. Change can’t come from the top because the top is comprised of only a few: millionaires and politicians. These few at the top pale in comparison to the numbers of all of us at the bottom, who really have the ability to create change with the help of local feedback and local incentives. He cited Martin Luther King, Ghandi, and other world leaders who created change from the bottom up. Martin Luther King wasn’t a millionaire or a politician, he was someone at the bottom with his freedom—and both the freedom and peace of others—at stake. Professor Easterly summed up his lecture by telling us that we need to campaign for more individual rights and equality in order to strengthen the bottom, and achieve goals necessary to bring positive change into the world. This has all given me new thoughts on how to truly bring change into the world, and makes me think about how true change can only come from the governed, opposed to it being created by the governing.

Through being entrepreneurs, activists, and people who want to honestly make this world a better place, we can become both financially and morally rich without even knowing how.