Nobel economist William Nordhaus dies; his work showed innovators capture just 2.2% of value
dscape · x · 2026-11-01
Nobel laureate economist William Nordhaus has died at 85. He shared the 2018 Nobel with Paul Romer for bringing climate change into macroeconomics, and co-authored the classic Samuelson & Nordhaus textbook.
The poster highlights his favorite Nordhaus paper, "Schumpeterian Profits in the American Economy" (2004): measuring how much of the value created by innovation accrues to the innovators themselves across US firms (excluding agriculture) from 1948-2001, the answer was roughly 2.2% — the rest went to society, mostly consumers, through lower prices and better products.
In other words, for every €100 of value an innovator creates, they keep about €2. The finding is frequently cited in debates about value distribution in the AI era: the gains from technological progress flow mainly to society rather than to the inventors.
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