If Ben Bernanke gave a commencement speech…

Actually, Fed Chairman Ben Bernanke did give a commencement address at Bard College at Simon’s Rock, Great Barrington, Massachusetts: Economic Prospects for the Long Run.

Not surprisingly, it’s a really interesting talk.

Here are his final two paragraphs, with emphasis added:

Finally, pessimists may be paying too little attention to the strength of the underlying economic and social forces that generate innovation in the modern world. Invention was once the province of the isolated scientist or tinkerer. The transmission of new ideas and the adaptation of the best new insights to commercial uses were slow and erratic. But all of that is changing radically. We live on a planet that is becoming richer and more populous, and in which not only the most advanced economies but also large emerging market nations like China and India increasingly see their economic futures as tied to technological innovation. In that context, the number of trained scientists and engineers is increasing rapidly, as are the resources for research being provided by universities, governments, and the private sector. Moreover, because of the Internet and other advances in communications, collaboration and the exchange of ideas take place at high speed and with little regard for geographic distance. For example, research papers are now disseminated and critiqued almost instantaneously rather than after publication in a journal several years after they are written. And, importantly, as trade and globalization increase the size of the potential market for new products, the possible economic rewards for being first with an innovative product or process are growing rapidly. In short, both humanity’s capacity to innovate and the incentives to innovate are greater today than at any other time in history.

Well, what does all this have to do with creativity and critical thinking, which is where I started? The history of technological innovation and economic development teaches us that change is the only constant. During your working lives, you will have to reinvent yourselves many times. Success and satisfaction will not come from mastering a fixed body of knowledge but from constant adaptation and creativity in a rapidly changing world. Engaging with and applying new technologies will be a crucial part of that adaptation. Your work here at Simon’s Rock, and the intellectual skills, creativity, and imagination that that work has fostered, are the best possible preparation for these challenges. And while I have emphasized technological and scientific advances today, it is important to remember that the arts and humanities facilitate new and creative thinking as well, while helping us to draw meaning that goes beyond the purely material aspects of our lives. I wish you the best in facing the difficult but exciting challenges that lie ahead. Congratulations.

It’s the cultural role of the aging to play the pessimist. That’s what we’re seeing today, with many middle-aged and older Americans bemoaning the state and direction of the nation. I hear in most of those complaints the fading echos of people who have lost their individual capacity to innovate and adjust.

In the speech, Bernanke notes the prevalent and pessimistic argument that younger Americans are just going to have to get used to slower economic growth. From Bernanke’s speech:

Indeed, some knowledgeable observers have recently made the case that the IT revolution, as important as it surely is, likely will not generate the transformative economic effects that flowed from the earlier technological revolutions. As a result, these observers argue, economic growth and change in coming decades likely will be noticeably slower than the pace to which Americans have become accustomed. Such an outcome would have important social and political–as well as economic–consequences for our country and the world.

Bernanke makes a compelling argument that such pessimists are probably incorrect. I agree with him.

For other interesting perspectives on Bernanke’s speech, check out Bill McBride at Calculated Risk and Neil Irwin at the Washington Post’s Wonkblog.