We are said to be living in an age of rapid technological transformation, with another game-changing new gadget just around the corner and innovations overhauling everything from how we communicate to what jobs we do.

But is our economic system really as innovative as we think? Not according to this week’s guest on Free Exchange.

Fredrik Erixon argues that far from being dominated by swashbuckling entrepreneurs, the version of Western capitalism in place today is defined by a dreary managerialism and a stultifying aversion to risk. The result is slow growth, stagnating living standards -- and unhappy voters.

Fredrik set out this argument in a book called The Innovation Illusion: How So Little Is Created By So Many Working So Hard, which he wrote with co-author Bjorn Weigel a few years ago. Fredrik is also the director of the European Centre for International Political Economy, a think tank based in Brussels.

I spoke to Fredrik about the ways in which we have lost our way economically, what that means politically, and we can rediscover the recipe for success.

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