Summer Reads: Silber on The Great Stagnation

August 17th, 2011 at 12:45 am | 12 Comments |

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FrumForum correspondents and readers are encouraged to blog about the books they are reading this August.  Please send any entries to editor[at]frumforum.com with the subject line, treatment “Summer Reads.”

Being home under the weather for a couple of days gave me ample time to read The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, buy viagra Got Sick, sick and Will (Eventually) Feel Better, by economist Tyler Cowen. Published early this year as an ebook, it proved highly popular and was reissued as a hardcover (the form in which I read it).

It’s perhaps a third to a half the length of your standard non-ebook, and contains much thought-provoking material to richly reward the short read.

For several hundred years, Cowen argues, the Western world in general and America in particular have benefitted from relatively abundant or accessible sources of economic growth — “low-hanging fruit” — such as newly opened land, expanded education, and technological breakthroughs ranging from electricity to pharmaceuticals.

The trouble is, he contends, the low-hanging fruit has been getting sparse in the past several decades. Yes, there is still much technological innovation but it’s largely focused on Internet-related sectors that don’t necessarily produce a lot of jobs or revenue. A great deal of financial innovation has been occurring but that only enriches small numbers of people without necessarily producing much social benefit.

The financial crisis, of course, involved dubious financial innovations, and as Cowen notes it arose basically because borrowers and investors felt wealthier and less vulnerable than they were — because they failed to recognize that wealth creation was not proceeding at the pace they had come to expect.

We have entered a technological plateau, according to Cowen, and while there may be more low-hanging fruit to be found in the future, we don’t know what or when that will be. Now, that’s not entirely bad news, he remarks, because rapid technological transformations can have downsides as well, as when the 20th century gave rise to technologically empowered totalitarian regimes.

But it is of course generally bad news that wealth creation is falling short of people’s expectations, and Cowen suggests plausibly that this expectations gap accounts for a good deal of the animosity in current-day politics. He also dismisses standard political nostrums — lower taxes from the right, more wealth redistribution from the left —as inadequate for dealing with the problem of diminished growth.

What to do then?  Cowen makes an intriguing recommendation:

Raise the social status of scientists.

He rightly notes that this would do much to spur technological advances. People are often motivated as much by status as by money, but scientists have tended not to garner the fame and prestige that their accomplishments merit. Norman Borlaug, Cowen points out, died in 2009 largely unknown to the public despite having led “Green Revolution” agricultural advances that saved millions of lives.

The goal of boosting the social status of scientists is one that, Cowen adds, “can be attained only in piecemeal, decentralized fashion.” Generous government funding for science is part of it, but no less important is a cultural disposition to know and care about science. He writes:

I don’t want a bunch of extra science prizes given out by the White House; what I want is that most people really care about science and view scientific achievement as a pinnacle of our best qualities as leaders of Western civilization. This is one point that Ayn Rand, the novelist, philosopher and oft eccentric worshipper of individual excellence got right, namely that we should all revere creators and scientific innovators.

For anyone who’s been waiting for a fervent endorsement of Ayn Rand here at FrumForum, consider the above to be it. Cowen goes on to note:

We shouldn’t trust individual scientists uncritically, but we should respect the scientific enterprise at a much higher level.

That’s good advice not just for laying a foundation for future economic growth, but also for boosting the intellectual credibility of the Republican Party.

As a final note, I would like to point out that in the mid-1990s I reviewed science writer John Horgan’s book The End of Science, which argued that the pace of scientific progress was slowing. At the time I was skeptical but in retrospect it seems to me that Horgan had a point. Cowen develops a similar theme, and ties it into economics and politics in a creative and probing way.

Recent Posts by Kenneth Silber



12 Comments so far ↓

  • Graychin

    [i]“Raise the social status of scientists.”

    “That’s good advice not just for laying a foundation for future economic growth, but also for boosting the intellectual credibility of the Republican Party.”[/i]

    A good start: stop denigrating climate scientists as perpetrators of a great hoax.

    • Demosthenes

      Another good move would be for the Republican Party to cut any and all ties with the Discovery Institute/the “Intelligent Design” community.

      Also, ensuring the JWST goes up!

  • LFC

    Republicans hate science and any scientist who gathers evidence in contradiction to right-wing preconceived notions. To us in the reality based world, thought means careful consideration of the evidence that is known, striving to fill holes where evidence has not yet been discovered, and testing of hypotheses. To those in the right-wing faith based, though it thinking of ways to protect what you already “know”.

    Exhibit A: Right-wingers hate Darwin but love Michael Behe.

    Exhibit B: Wikipedia actually sums up the right-wing climate change denier view pretty well as they cling to the non-peer reviewed rantings and writings of people who, almost to a person, are not climate scientists:

    In the scientific literature, there is a strong consensus that global surface temperatures have increased in recent decades and that the trend is caused mainly by human-induced emissions of greenhouse gases. No scientific body of national or international standing disagrees with this view, though a few organisations hold non-committal positions.

    • Carney

      Yeah, the Left is all about science, except when science smashes the LEFT’s cherished values such as egalitarianism. Take a look at how welcoming the Left is to scientists looking into group differences and genetic effects on IQ. Ask Larry Summers why he was hounded out of Harvard.

  • jamesj

    “Raise the social status of scientists.”

    Good luck with that. Major politicians and pundits in the Republican Party are racing to demean science (and any other intellectual activity) at every turn.

  • Left And Right Agree: We’re Doomed | Poison Your Mind

    [...] Kenneth Silber sums up Tyler Cowen’s argument in The Great Stagnation: For several hundred years, Cowen argues, the Western world in general and America in particular have benefitted from relatively abundant or accessible sources of economic growth — “low-hanging fruit” — such as newly opened land, expanded education, and technological breakthroughs ranging from electricity to pharmaceuticals. [...]

  • Houndentenor

    America boomed in the post war years because this is where the innovations were coming from. Yes, other countries were doing similar things to automobiles, washing machines, television sets and microwave ovens, but we seemed to be at the forefront or very close to it all the time. The sectors that provide us with what little exporting we still do (music, film, television, software) are still producing a great deal of product right here (and paying good wages while doing it). Other than that our financial “leaders” seem to think that we can consume more than anyone else in the world (per capita) without producing any of it for ourselves and maintain a first world economy. It can’t be done. The economy is stagnant because there’s nothing new to create the growth we need. No tax cut or spending increase is going to make that happen. It’s going to happen when some nerd in a garage invents the new thing that everyone wants. That’s how it’s always been and I don’t see why everyone is still buying into voodoo economics to create jobs. (And even then, why would we assume those jobs won’t be in India and China where they still make stuff?)

  • the lee

    Don’t forget eonomists! Much like climate scientists, we also get ignored or accused of being part of some grand hoax to undermine capitalism and the GOP. What the right wing seems to forget is that economists are basically just math nerds and statisticians.

  • Assorted links — Marginal Revolution

    [...] 5. Der Theoretiker des Stillstands, Handelsblatt profile of me.  And how a German politician apologizes for an affair with a 16-year-old (in German), no hope for the eurozone, hat tip Yana.  In English, Kenneth Silber reviews TGS. [...]

  • Carney

    There’s still much more we can do. Most obviously and glaringly un-picked is the low-hanging fruit of the New Frontier that Nixon walled us off from by diverting the space program into the useless shuttle and station.

    But Mars still awaits as open land, no further away (six months) than Australia from Britain in the late 1700s, with no colder temperatures than Antarctica at its worst and rising to 60F in the equator in summer. With a 24 hour day and all the elements needed for industry and agriculture in abundance, Mars is land we can settle.

    We can open it up with a measly $5 billion a year using the Mars Direct plan, adopted in its essentials by the Bush Administration but cancelled by Obama before Bush got around to making a critical mass of progress on it.

    A new frontier means labor shortages and higher wages, creating pressure for technological innovation both to that problem and to deal with the unimproved wilderness or hostile environment. It also heavily selects for pragmatism, results, and can-do optimism; de-emphasizing titles and rules prized by the sclerotic and hidebound bureaucracy back home, as well as cynical and decadent ennui. As a refuge for unconventional thinkers it enables experimentation with new ways of social, political, and economic organization. All these things from America greatly refreshed and benefited Europe and the world, as Mars could do for us.

    An exciting and open future as a multi-planet, spacefaring civilization awaits us, if we take up the challenge the right way, via brass tacks, sensible, affordable engineering.

    Read “The Case for Mars: the Plan to Settle the Red Planet and Why We Must” by aerospace and nuclear engineer Dr. Robert Zubrin; and

    “Entering Space: Creating a Spacefaring Civilization” by the same author. His novel “First Landing”, his humorous guidebook “How to Live on Mars”, and other books are also worth reading.

    See this inspiring documentary, which has aired on the Science Channel and the Discovery Channel, for more on Mars Direct and the open future:

    http://www.youtube.com/watch?v=xfMtRn5Ylfc

    • Demosthenes

      Hell yes!

    • Steve D

      Don’t blame Nixon and the shuttle. Blame all the people who hated Apollo because it was successful. They got their way and we “took all that money and spent it on problems here on earth.” And after 40 years, nobody has been able to point to a single benefit we got from spending that money “here on earth.”

      To be really spacefaring, we need to be able to leave earth cheaply and easily. The Shuttle was an attempt to do that. It didn’t work out as planned but the eventual way we will become spacefaring will probably incorporate a lot of Shuttle-like design. In particular, you want to be able to come back without deploying a fleet of ships and helicopters to pick you up.

      By the way, I seriously doubt you’ll ever see 60F on Mars, even on the equator in the summer. Zero, probably. Above 32? Maybe but dubious.

      The “low hanging fruit” amounted to elimination of constraints so that growth wasn’t a zero sum game. I don’t think there’s the slightest coincidence that freedom grew at the same time. After all, I can let you grow if you don’t threaten me. I seriously wonder if we can have freedom in a slow growth or no growth world. Societies that believe the world is zero sum are notoriously oppressive because if you grow, it must be at someone else’s expense, and therefore society, or the powerful, must move to stop you. That’s also the mentality that a lot of our social activists have: rich people got that way by screwing poor people.