Political discourse and behavior have become highly polarized, and what I like to call the ‘honest middle’ cannot be heard above the din. People often blame the economic policies of ‘the other side’ or they belligerently snipe at foreign competition. But we are failing to understand why we are failing. All of these problems have a single, little-noticed root cause: We have been living off low-hanging fruit for at least three hundred years. We have built social and economic institutions on the expectation of a lot of low-hanging fruit, but that fruit is mostly gone.
In a figurative sense, the American economy has enjoyed lots of low-hanging fruit since at least the seventeenth century, whether it be free land, lots of immigrant labor, or powerful new technologies. Yet during the last forty years, that low-hanging fruit started disappearing, and we started pretending it was still there. We have failed to recognize that we are at a technological plateau and the trees are barer than we would like to think. That's it. That is what has gone wrong.
“The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better.”
ReplyDeleteby Tyler Cowen
Few people outside a small niche of economists and intellectuals took notice at the time, but a potentially important event quietly took place last week: the publication on Tuesday of Tyler Cowen’s concise treatise — as a $4 Kindle e-book, no less — called “The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better.”
ReplyDeleteMr. Cowen is a libertarian-leaning economist at George Mason University and a columnist for The New York Times, but he is best-known for the sharp, thoughtful blog called “Marginal Revolution” that he and colleague Alex Tabarrok have been keeping since 2003.
This isn’t Mr. Cowen’s first book, but it is probably his most important — or at least, his most impactful — one. It’s not that he has the final say on America’s current economic malaise, but rather because he takes the debate in an entirely new direction (new, at least, to most people) that gives so much value to his work. His assessment may be bleak, but it is honest. His arguments aren’t perfect, and “low-hanging fruit” doesn’t quite have the catchiness of “The World is Flat,” but in terms of framing the dialogue Tyler Cowen may very well turn out to be this decade’s Thomas Friedman.
His essential point is that economic development and technological innovation have reached a plateau, and unfortunately we in America are only now just realizing it: